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A vast majority of Sri Lankans are usually unaware of the power games in the higher echelons of the UPFA Government. Sometimes they glean such issues by reading official statements and media accounts. Other times they are in the dark.

There are also many instances where inherent contradictions or misleading assertions prevent them from forming a correct picture concerning an issue. They end up being confused. One such instance surfaced this week. That is the move by the well-known Australian gambling magnate James Packer to invest US$ 350 million in what is officially described as a “mixed development project” to be located at D.R. Wijewardene Mawatha in Colombo. It was a tie-up with a wealthy and influential local businessman in the gambling trade in Colombo. Another is a US$ 650 million “Integrated Resort” by Waterfront Properties (Private) Ltd., an offshoot of John Keells. It is to be located at Justice Akbar Mawatha in Kompannaveediya (Slave Island).

For many weeks before the deal was finalised, Colombo’s business circles were buzzing with the news that the Australian investment would include a state-of-the-art casino. However, Government politicians scrupulously avoided the use of the word “casino,” considered to be politically and culturally insensitive. This is even if some of them, for different reasons, privately preferred the deal and were strong backers. In a statement last Saturday, Investment Promotion Lakshman Minister Lankshman Yapa Abeywardena declared, “the claims that new licences are being issued to foreigners to operate casinos is not correct.” He added, “Under the Gaming and Betting Act of 1988 there are four centres involved in gaming in Colombo. They are located near schools and places of worship. The Government has decided to bring them to one location. Therefore the Government will not be issuing any new licences for gaming activities, but bring them into one zone. John Keells and James Packer have agreed to invest US$ 650 million and US$ 350 million respectively in a mixed development project which has hotels, shopping complexes…”

The statement reminded one of the well-known Sinhala adage – Kohade Yanney (Where are you headed) and the answer Malley Pol (The bag contains coconuts). To silence critics who complained of casinos, Abeywardena spoke of grouping gaming centres into one area and claimed that no new licences were being issued, not even to foreigners. Like the adage, he did not answer the issue but deftly parried it. Even worse, the grouping of such casinos in one zone is not possible until Regulations related to the 1988 Act he referred to are Gazetted.

However, a full page advertisement in the print media headlined “Sri Lanka’s time to shine,” inserted by Crown Sri Lanka said that a “luxury resort consisting of 450 hotel rooms and VIP suites,” will have among other things, “gaming and entertainment facilities.” It said: “Crown hopes to redefine luxury in Sri Lanka and create a new icon for the ‘Wonder of Asia’.” Crown Sri Lanka is a joint venture between Packer’s Crown Group and Sri Lanka’s biggest gaming company, Rank Holdings. Packer already operates casinos in Australia, Macau, Britain and the United States. In Australia where his main chain is located, clients are even provided lessons on how to gamble at a casino.

This time, it was not only the vast majority of Sri Lankans who were confused. So were some of the Government’s own partners. In August, Minister Abeywardena had recommended to the Cabinet of ministers that the two projects — John Keels and Crown Lanka — be granted “strategic enterprise” status. In a Cabinet note dated August 21, Minister Champika Ranawaka raised strong objections. He argued that casinos should not be prioritised to gain economic growth and said it went against the core values of Mahinda Chinthana or ‘Vision of Mahinda’. It was the virtual election manifesto when Rajapaksa contested the presidential poll in November 2005. Ranawaka then argued that the Government should stand for promotion of tourism without the proliferation of casinos, which would have a snowballing effect on other vices like the increase in prostitution, smuggling of contraband, small arms, lead to a ruin of social values and family budgets.

The Strategic Development Projects Act of 2008, which offers a multitude of tax and other concessions to investors, did not have provision to grant special status to casinos. They assumed some legal status after new tax laws that legalised gaming. This was followed with a law in 2011 — meant to take effect from 1st January 2012 — where further legal recognition was conferred on casinos. A UPFA source said even the JHU voted for this legislation. However, a senior JHU member said, “We did vote only because it was meant to regulate and control casinos. They were to ensure all casinos were confined to one zone. There was a suggestion that it be restricted to the Kalpitiya area alone. However, the regulations that were to follow this law were never introduced.” Provisions in ten different financial acts were incorporated together to offer tax holidays and a wide variety of other concessions for those bringing in an investment of more than US$ 250 million. This is under the Strategic Development Projects Act. Among the ten are the Inland Revenue Act, No 10 of 2006, The Value Added Tax Act, Act No 14 of 2002, The Finance Act No 11 of 2002, The Finance Act No 5 of 2005, The Excise (Special Provisions) Act No 13 of 1989, The Economic Service Charge Act No 13 of 2006, The Debits Tax Act No 16 of 2002 and the Customs Ordinance (Chapter 235).

The Strategic Development Project defines a project as one “which is in the national interest and which is likely to bring economic and social benefit to the country and which is also likely to change the landscape of the country, primarily through (a) the strategic importance attached to the proposed provision of goods and services, which will be of benefit to the public (b) the substantial inflow of foreign exchange to the country (c) the substantial employment which will be generated and the enhancement of the income earning opportunities; and (d) the envisaged transformation in terms of technology.”

The fact that Minister Abeywardena has signed a Gazette notification, despite earlier objections, to go ahead with the Australian-backed casino project, irked the JHU. Minister Ranawaka pointed out to JHU members that in other countries casinos were located in areas away from their capital cities. In the United States it was in Las Vegas, for India it was off Goa and for China in Macau. He asked why such a project was being located in the heart of Colombo.

The JHU, which takes credit for “rallying all nationalist forces to back the Rajapaksa administration”, was livid that two Gazette notifications, one in respect of projects for John Keells and the other for Crown, dated July 18, 2013 and September 23, 2013 respectively, were to be tabled in Parliament. Last Wednesday and Thursday had been set apart for debating the Gazette notifications that gave a wide array of concessions to the foreign investors. That included exemption from corporate taxes, profits exempted from income tax, expatriate staff would be exempt from PAYE tax, no VAT payments for six months, no port and airport development fees, exemption from Construction Industry Guarantee Levy and no Customs duty on import of capital goods and project related items. Minister Abeywardena’s Gazette notifications did mention that the projects in question would include “entertainment and gaming facilities,” a subject on which he had chosen to remain silent in the earlier weeks.

The Central Committee of the JHU met at an emergency session to discuss the matter. It decided to vote against the orders made by the Minister of Foreign Investment when they came up for debate in Parliament. It was also decided that the party should bring its Central Committee’s decision to President Rajapaksa’s attention. When Minister Ranawaka did that, Rajapaksa hurriedly summoned a meeting of leaders of parties constituting the United People’s Freedom Alliance (UPFA). It was held at the Presidential Secretariat just ahead of the meeting of the Government Parliamentary Group last Monday evening.

An agitated President Rajapaksa had to sit through a stormy session. Declaring the JHU’s opposition was Minister Ranawaka. He said his party would not support the Government move and added that casinos need not be given all forms of concessions. He also said the casinos should not be located in Colombo. “We are totally against any concessions being offered,” he said. Rajapaksa was to explain that restrictions could be placed on gaming including a provision that it was only for foreigners. Some of the senior Sri Lanka Freedom Party (SLFP) members were absent. SLFP General Secretary Maithripala Sirisena was away in China. Later, a message was sent to the Sri Lanka Embassy in Beijing advising him to return to Colombo. Chief Government Whip and Mahajana Eksath Peramuna (MEP) Leader Dinesh Gunawardena was not present either. Sri Lanka Muslim Congress (SLMC) Leader and Justice Minister Rauff Hakeem said his party too would vote against the casino move. He said the SLMC was opposed in principle to casinos.

This was to draw an acid remark from Rajapaksa, who said, “Some of your strong supporters are gamblers.” This provoked laughter from the Minister of Justice. Minister Abeywardena noted that Sri Lanka received a total of some one billion dollars a year in Foreign Direct Investment (FDI). The two proposed ventures alone would generate an amount similar to that, he said.

Rajapaksa then announced that the Government would not go ahead with the Parliamentary debate last Wednesday. Instead, the ministers would further discuss the issue at their weekly Cabinet meeting on Thursday. It turned out that the meeting was an equally stormy one and the bulk of the time was devoted to the casino issue. On hand to explain matters and answer questions raised was Treasury Secretary P.B. Jayasundera and other senior officials. At one point, there was a humorous diversion when Vijithamuni Zoysa, Deputy Minister of Rehabilitation and Prison Reforms, (standing in for his Minister), who was obviously supporting the setting up of casinos, declared, “If we are to stop this, we also should ban people playing “booruwa” at funeral houses. The card game is one in which the caller wins if the card he calls for falls into his lot rather than in the one meant for the person who deals. The game is also colloquially referred to as “asking-hitting” and is sometimes played at funeral houses during late hours to keep mourners from falling asleep.

An angry Rajapaksa was to exhort, “Oya owa kiyanna epa (You don’t say such things).” He said similar foolish remarks were made soon after the Non Aligned Summit Conference in Colombo in 1976 by the then parliamentarian Augustine Fonseka. He was once a Deputy Minister of Fisheries and was defeated at the parliamentary elections in 1977 by Festus Perera. When then Prime Minister, Sirimavo Bandaranaike was discussing what to do with a fleet of Peugeot cars that had been imported for use during the summit, Fonseka had said he was even prepared to travel by bus to his Wennappuwa electorate. The cars were later sold and some blamed it on Fonseka’s remarks. Rajapaksa advised the deputy minister to be cautious and not to make such remarks. Besides Minister Ranawaka who expressed strong opposition, a note of caution was also sounded by Minister Wimal Weerawansa, leader of the National Freedom Front (NFF). In marked contrast to his previous assertions, it was mild and matter of fact, said one minister.

Campaigners for granting approval for the casino have also perhaps mistakenly resorted to some disinformation. One, who is now overseeing some important responsibilities in a key Ministry said Packer was the owner of Britain’s Channel 4 and soon all criticism against the Government would end. Another said that the Australian Fox (cable TV) channel was owned by Packer. The real owner, however, is media mogul Rupert Murdoch. Packer also has no link to Channel 4.

Minister Vasudeva Nanayakkara queried at the Cabinet meeting whether allowing the casinos to operate would lead to a drain in Sri Lanka’s foreign exchange resources. A lengthy explanation was offered by Treasury Secretary Jayasundera. Economic Development Minister Basil Rajapaksa pointed out an instance where an Indian politician had gambled at a casino. When he needed more money, all he had to do was to telephone someone in his country. Within hours someone in Sri Lanka made available US$ 150,000. Minister Rajapaksa noted that the regulations that were to follow the gaming laws (of 1988) had not yet been introduced. Such regulations would not only have confined the operation of casinos to one particular zone but would have also given the outlines of who should patronise them, how they should bring in funds through banks to place their bets etc. Minister Abeywardena was to repeat his remarks that annually the Foreign Direct Investment (FDI) was around one billion US dollars. However, the two recent approvals would bring in that amount.

There was also talk of how casino operators planned to lure rich Indian entrepreneurs by offering them free air tickets and accommodation to gamble at casinos. There were also questions on why the Gazette notifications had to mention the various concessions thus bringing issues to light. President Rajapaksa was to say he had to be open about it. It was pointed out that even a barber shop, if it was included in the project, had to be specified. Moreover, it was also pointed out that James Packer had insisted on these matters being placed on record. President Rajapaksa noted that even those conducting betting shops (taking bets on foreign horse racing) were conduction such gaming centres. He said that whilst one such operator (whose main base is outside Colombo) was paying his taxes satisfactorily, there was another (in Colombo) who was tardy and making questionable declarations. That was to avoid paying more taxes.

President Rajapaksa was to ultimately declare that the Government should make clear the terms for the casinos. The casinos are now not likely to get blanket tax concessions. It is not immediately clear how they would react to this move. One Minister argued that “they would still come since the stakes are very high for them.” It was agreed that the casinos be asked to pay five per cent of their gross turnover instead of 40 per cent of their profits. It was pointed out that like what happens in some casinos in Singapore, operators could ‘play around with accounts.’ Ministers have endorsed President Rajapaksa’s recommendation to embody the new changes and also make modifications to the format on which the new Gazette notifications will be put out. It is only thereafter that the Gazettes would be presented to Parliament for a two-day debate. Nevertheless, it is not clear whether the JHU would still vote with the Government though Wimal Weerawansa’s NFF, despite its heavily muted opposition in public, would still support it.

However, the issue of casinos has gone beyond the UPFA’s partners. Opposition UNP leader Ranil Wickremesinghe has named a five-member committee to meet leaders of the Buddhist clergy and civil society organisations to oppose the opening of casinos and granting them heavy tax concessions. The committee is headed by Karu Jayasuriya and includes Joseph Michael Perera, Wijayadasa Rajapaksha, Ajith Perera and Kabir Hashim, all MPs. The committee will also formulate a countrywide campaign to educate the people about what the UNP says are “evils” that will come about with the establishment of casinos.

With the casino issue dominating Thursday’s Cabinet meeting, there was little time for discussion of other issues. However, the ministers gave approval for the setting up of a National Authority for the protection of victims of crime. It came on a recommendation by Justice Minister Hakeem. UPFA sources said yesterday the Government wanted to pass the proposed Assistance and Protection Victims of Crimes (NAPVC) Bill in Parliament ahead of the UN Human Rights Council sessions in Geneva in March next year. The setting up of this authority and provisions of the draft bill were exclusively revealed in the front-page lead story in the Sunday Times of October 13.

Ministers decided on Thursday that the draft bill should now go before the Cabinet Sub Committee on Legislation for a clause by clause scrutiny. This Sub Committee is chaired by Minister Susil Premjayantha. Commenting on the new Bill, Attorney General Palitha Fernando has told the Ministry of Justice that the creation of a statutory authority designated National Authority for the Protection of Victims of Crime and Witnesses would “promote the recognition of, respect to, and the protection of the rights of Victims of Crime and entitlements of Witnesses.” He has noted that the Authority is also to be vested with the quasi-judicial function of receiving complaints relating to alleged and imminent infringement of rights and entitlements of Victims of Crime and Witnesses, conduct investigations and inquiries into such complaints and require relevant authorities to take appropriate corrective measures in this regard.”

In a note to the Ministry of Justice, Fernando has said the proposed law “seeks to fulfil a long felt requirement of the Criminal Justice System of Sri Lanka.” He has added: “The proposed law will create a fine balance in the Criminal Justice System of Sri Lanka, between the rights of the accused, the rights and entitlements of victims of crime and the entitlements of witnesses, and will thereby facilitate the conduct of fair trials and justice being meted out to both victims of crime and accused.” He has said that the Bill does “not contain features which are contrary to the interests of the State or could be used to cause harm to Sri Lanka.” He has added that the Bill, once enacted, “can be brought into effect in parts and will not cause an unbearable financial burden on the State.”

This week’s developments show that it is not only the issue of casinos that is on the Government’s table. Behind the scenes, initiatives are also being taken to address issues contained in the two US-backed resolutions before the UN Human Rights Council. Some of the issues in this regard figured during a breakfast meeting between President Mahinda Rajapaksa and US Ambassador Michele Sison on Monday. This is whilst the clock is ticking away for the Commonwealth Heads of Government Meeting (CHOGM) in Colombo. Even the glory of a CHOGM Chair-in-office, a virtual Chairmanship of the Commonwealth has failed to buoy the UPFA leadership who feel there are many other issues to address. Foremost, without doubt, would be to keep the unity among the UPFA partners. Visible cracks need to be patched up to avoid a serious crisis. On the other hand, there is greater consolation in the form of a weak opposition that is not putting the ruling coalition under any real threat of breaking up.

UNP crisis will be solved by next month: Ranil

After a round of tripartite talks, the crisis in the country’s main opposition United National Party (UNP) appears set to take a new turn.
If the on-going dialogue does not end successfully, the party’s Working Committee will take over the task of charting a new course for the party including the appointment of a new body to manage its affairs.

This is particularly in the light of the ‘reformist faction’ led by Sajith Premadasa poised to demand that leader Ranil Wickremesinghe step down in keeping with a purported assurance given to some Buddhist monks. “I gave no such assurance to anyone,” UNP and Opposition Leader Wickremesinghe told the Sunday Times. He said the meeting with Premadasa and Karu Jayasuriya, both former deputy leaders, was the result of a discussion that took place at the Working Committee.

“There I said that we must all get together and I offered to empower a party apparatus to take responsibility and run the campaign for the impending elections,” he said. It was former Speaker Joseph Michael Perera who suggested that it be announced the next day, a Wednesday. However, since he had scheduled a meeting with the visiting Indian External Affairs Minister, Wickremesinghe had offered to do so on Thursday. Premadasa had insisted on going by a letter given to the clergy, he said.

Wickremesinghe declared that as party leader, he had not entrusted anyone to talk to both Premadasa and Jayasuriya. His remarks put paid to reports that UNP parliamentarian Kabir Hashim was doing so on his behalf. He acknowledged that several senior members of the UNP were in consultation with “various persons” but those “initiatives were undertaken by them alone.” He declined to comment when asked whether he would hold another meeting with the duo but a source close to the UNP leader said “one more such meeting cannot be ruled out.” That again would hinge on the response of Premadasa, the source said. Yet, until yesterday neither Premadasa nor Jayasuriya had been informed of any further talks.

Wickremesinghe nevertheless said that issues confronting the party would be definitely resolved before the end of November. “Without prolonging the issues, the Working Committee would take decisions on the course of action if no meaningful results emerge. Thereafter, all stakeholders will be kept informed,” Wickremesinghe revealed. He said an apparatus drawing its power from the Working Committee, be it a Leadership Council or otherwise, with specific tasks was being considered. “The nomenclature, the composition, powers such a body would enjoy, whether it should include office bearers and its mandate would have to come from the Working Committee,” Wickremesinghe said. He said he would handle parliamentary affairs and continue to hold office as party and opposition leader.

He pointed out that there was already general consensus that Karu Jayasuriya would be the chairman of the proposed body. “Its powers will have to be drawn by looking at the minutes of the Working Committee. At one time, the late J.R. Jayewardene, then UNP leader, vested powers on then chairman, the late N.G.P. Panditharatne. That was also carried out through the Working Committee, Wickremesinghe said.

Although the party’s Working Committee was made up of 90 members, the majority are picked by the committee itself. “I appoint 20 members, 15 of them from those serving in different positions in the party like trade union leaders etc. Hence, my own choice only boils down to some five persons,” he pointed out. This, he said, was in keeping with the UNP Constitution introduced in 2007. “There is a mistaken notion that I appoint the entire Working Committee,” he added.

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